BATH, Ind. — Farmers are good at producing crops; it’s what they do. When it comes to farm finance and risk management they should glean all the information they can from authorities and experts, said Jodie Creek, assistant vice president of ag lending at Bath State Bank.

“I don’t think there is anything wrong with asking questions to try to minimize their risk,” Creek said.

“It’s tough enough to deal with Mother Nature and fluctuating prices.” Many things must come into consideration: To help make their operation profitable, farmers need to think about marketing, crop insurance - they need to work closely with their insurance agent, their lender and their accountant, Creek said.

“This year has been exceptionally hard for farmers because of the rising interest rates and the fact that input costs are up significantly,” Creek said.

“It’s hard to make a profit because of the price/cost squeeze that’s happening. That’s another issue that farmers have to deal with.”

It’s important that farmers work with their crop insurance agent to make sure they’ve got the most cost effective coverage for their operation, she said.

Farmers need to have open communication with their lender, Creek said. They may want to provide more collateral so the lender can offer them the best rate.

“Farmers need to know what their break-even point is and lock in their profits,” Creek said.

“They should consider working with a marketing company to develop marketing plans for their operation to get the best possible price.”

Creek advised clients to visit with their tax accountant before the end of the year.

“This year farmers are getting the counter-cyclical payment; that will be some additional income,” Creek said. “Hopefully they will work with their tax accountant to minimize their tax liability.”

Bath State Bank was formed in 1924 by a group of area farmers and continues to serve the agricultural community. It has a $74 million ag portfolio. Creek has been with the bank for 10 years.

“Farmers need to do everything they can to insure that they are profitable and are going to be able to sustain all the changes that are going on in agriculture,” Creek said.

“That can be challenging.”

This farm news was published in the Oct. 25, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.